Juan Pablo Vasquez and Manuel Caceres, both former senior executives of Miami-based Latin Node, Inc. (Latinode) recently pleaded guilty to conspiring to pay bribes to government officials in Honduras.  These guilty pleas are part of the ongoing story of Latinode and its former executives who allegedly violated the Foreign Corrupt Practices Act (FCPA) by paying bribes to officials of state owned Honduran telecommunications companies.

Conduct

  • Vasquez and Caceres each pleaded guilty to one count of conspiracy to violate the FCPA for their respective roles in a scheme to bribe officials at Honduras’ state-owned Empresa Hondureña de Telecomunicaciones (Hondutel).
  • Latinode provided telecommunications services to Honduras and Yemen. From March 2004 to June 2007, Latinode paid or caused to be paid US$2,249,543 directly or through third-parties, knowing that at least some of the funds would be passed on as bribes to “foreign officials” including officials of Honduran telecommunications companies, which were state-owned entities (SOE) under the FCPA. Latinode admitted that it made these payments in exchange for obtaining an agreement with the Honduran SOE and for reducing the rate charged under the agreements with the Honduran SOE. 
  • From the end of 2000 until 2007 Vasquez served as a Latinode senior official, holding such titles as the Chief Commercial Officer and Vice President of Sales. Officially, Vasquez was responsible for, among other things, Latinode's commercial and sales relationships with long distance carriers. His principal role in the scheme was to facilitate payments to the three officials to secure rate reductions to the existing interchange agreement
  • From September 2004 to 2007, Caceras also was a senior executive, who held titles such as Vice President of Business Development. Caceres was responsible for, among other things, developing LatiNode's business in Honduras. His principal role in the scheme was to negotiate the payment of bribes with Hondutel officials in exchange for securing rate reductions and other benefits.

Penalty

  • Vasquez and Caceres each face up to five years in prison and a fine of $250,000 or more.

Notes

  • Latinode has paid a $2 million fine as part of its 2009 agreement to plead guilty to a one-count information charging the company with a criminal violation of the FCPA. The DOJ represented that the investigation’s resolution reflected, “in large part,” the acts of eLandia International, Inc. (eLandia), Latinode’s corporate parent, in disclosing the potential violations to the DOJ after eLandia’s acquisition of Latinode. eLandia voluntarily disclosed to the DOJ the conduct after discovering it, conducted an internal investigation, shared the internal investigation’s factual results with the DOJ, cooperated fully with the DOJ, and took remedial action including terminating senior Latinode management with involvement in or knowledge of the violations.
  • Previously, Manuel Salvoch (another ex-senior official) and Jorge Granados (the ex-CEO and founder of Latinode) each pleaded guilty to one count of conspiracy for his role in the conspiracy.  At sentencing each faces five years in prison and a fine of at least $250,000.